Wise Group plc (WISE) Earnings Call Transcript & Summary

Good morning, everybody. Happy Tuesday morning. For those of you haven't met me, my name is Matt Briers. I'm the CFO here at Wise. And I'm going to give you an update on our first quarter of the year. So what's going to happen is, I'll give you a quick update on what's happened, how we've done and then we'll hand over to some Q&A afterwards. We'll race through the logistics of that, but basically, we're trying this new Zoom -- fancy Zoom format. So please just raise your hand and Martin here will kind of read out your question or you can read out your question. Right. So what you can see, for those who've have already seen our results and what will just follow is, we've made great progress in this quarter on our mission, and you can see evidence around the strong fundamentals of what Wise is about. So one of those. First, as you know, we're disrupting a massive market. People and businesses pay GBP 2 trillion -- move GBP 2 trillion and GBP 9 trillion around the world and pay huge fee, it's incredibly slow and it's incredibly painful. And we've been disrupting that since we got started. And what you can see now in our results is we moved over GBP 24 billion in the quarter, which is up 49% on the previous year. And you think about that, that's almost GBP 100 billion of run rate of volume. On the one hand, that's a huge amount of volume. It's actually more than every other player that does this. So we're a market leader. But on the other hand, it's still tiny. There's still trillions to move and hundreds of millions of people to help, but it is working. We are structuring it. So how do we do this? So the second thing is we do this with amazing products. It's way more than just sending money now, way more than just transfers. Our Wise Account and our Wise business product are helping millions of people and hundreds of thousands of businesses around the world. And they don't just send, they receive money with us. They hold the money. They spend the money on our cards and they do invest that money now in the U.K. We've seen our active customer base in the quarter grew 36% year-over-year. Actually, that growth held -- has actually accelerated in some areas. But these products can't just work on their own. These products work on our infrastructure. So the third key thing is all of these products and what we do is fundamentally dependent on the infrastructure that we've built, which is radically better than what anyone else has got. We've rebuilt the way money moves around the world. And what does this help us do? Well, amazingly, for the first time we can say that more than half of our payments were instant. That means that actually, if you make a payment, you look at your phone, the payment is within 20 seconds available in the recipients account to use, which is totally unthinkable versus what we started, entirely unthinkable versus what you might get from your bank. And customers absolutely love this. This is what drives the Net Promoter Score about 70%. This is, therefore, what drives 2/3 of our customers to come through referral, that fundamentally means that we can grow our business radically more efficiently than anyone else. And then finally, we do all of these things, these huge investments in our long-term infrastructure, but we do it profitably. We're able to offer a radically lower price to our customers, whilst running a profitable model, which is quite rare. And actually, as you know, our goal is to push those prices down. It's long known that actually the industry and the market we operate in is right, the disruption around price, not just the level that you offer, but the transparency through which you offer this. Our prices over the years have come down. You can see how hard it is, how much investment is needed to do that. But what's also clear is whilst we have a radically low price, we're able to invest significant funds in our product, which grows our infrastructure, which enables these products and also invest in marketing and these investments are incredibly efficient. The payback on our marketing and the IRR on our product spend are very healthy and very high. But we constrained that while still offering a 20% profit margin. So in summary, if you think back, we disrupt a massive market. We're growing -- moving an awful lot of volume, but actually we are still small. We do that, thanks to these better products, where this all depends on our infrastructure, and we're doing this in a profitable model. So let me just give you a bit more on the financials and the growth, and now I'll move to some Q&A. So as said, we moved GBP 24.4 billion, growing 49% year-on-year. We have 5 million active customers with both personal and business customer active rates growing in the mid-30%. Actually, the personnel growth has accelerated over some of the quarters we saw last year. The amount of volume that customers move has also grown, but this is particularly with businesses. We see the VPC growing very healthy, this is driven by a couple of things. One is our product is getting much better, both Wise Account for people and Wise Business product, assuming when people use that versus the Send Money Product, they move more money, they stay with us for longer. And we have a much wider set of fee income that they pay us, they don't just pay us for converting money, they might pay us an account fee, they might pay us for making domestic payments. And we also we get interchange income but there's also an element here due to the environment. So we're in an inflationary environment, we know. So that's helping. We see that businesses are paying -- their supply chain costs have gone up, and we may be seeing of late these as well. And also when you see FX volatility, there's no doubt that people sometimes move money when they see the rate move. So maybe we're seeing some of the volume come forward. By either way, it's just 1 quarter out of many years. It just shows good progress. So -- and then finally, what's happened on revenue. Our take rates have stayed relatively flat over this period, actually increased Q-on-Q, and we've seen the conversion price stay relatively stable, but we've seen an increase in other fees as people using their card more. And maybe this is -- we're seeing people more traveling a lot more as the world is starting to open up. So overall, we're very proud of these results, but they're just one data point in the longer picture of Wise of how we're disrupting this market, building amazing products, helping people shift to us from their bank. Let me remind on our amazing infrastructure, which we're building over the next decade, whilst doing this profitably and making super highly efficient investments in our future growth. So I'm going to pause there, and I'll look forward to taking a few questions.

Excellent. Thank you, Matt. [Operator Instructions] Our first question comes from the line of Mohammed Moawalla at Goldman Sachs. Hi, Mo, I don't know if you can read the question out live or...

Great. Can you hear me now, Matt?

Got you. Thanks, Mo.

So I have 2, if I may. Firstly, you've obviously been investing quite significantly in the business over the past 12 months. How much of the sort of acceleration can you kind of attribute to the investments that you're making? Or is it also just kind of the structural growth that you are sort of seeing? And secondly, Wise Account obviously seems to be gaining pretty strong traction. So just curious to understand penetration levels across both the personal and the business side and sort of the attach rate to that? Because, obviously, we're now starting to see some of that in the take rate as well. So curious to get your thoughts on that as well.

Okay. Great. I have to apologize, we're in the start-up build, company build around the shortage and it sounds like they're building a company next door. So the questions were just to repeat, why is this growth happening? How much of that do we attribute to the investments we've been making just now? And then the second, Wise Account, essentially, what do we see from the penetration of that and the attach rates and how does that progress? I hope I've got that right, Mo.

Yes.

So no doubt, our growth at the minute is strongly driven by adoption of the Wise Account. So that's people instead of using us just to send money, using us to hold, receive, spend and send. And we showed in our results that a couple of weeks ago that about 20% of our product -- 20% of our customers are using the Wise Account. Now that's growing at the rate you can see actually, you can see the deposit base growing by about 80%. So you can see the increasing adoption of Wise Account in our product. Our businesses, as we showed in the listing around half of our business is using the Wise Accounts when they're active. And again, these things are just fundamental positive intrinsic drivers of the growth in the business. We're seeing these cohorts pay better as we've invested in the product, we see less churn and they start moving more money. We've been investing in -- sorry, to answer your question, Mo, we've been investing in this product 4 or 5 years. So I can't say the growth we see today is a function of the things we built last quarter, but rather this takes time to build this account and get us adoption. So what I can tell you is, is we're still investing in things in this product, which we believe are high-return investments. And actually, as we roll the Wise Account out over our base. For example, we launched it in Brazil, we launched it in Malaysia, but actually it's not those markets that are driving the growth this quarter, rather we have this runway of investments and returns for the longer term. Then on the Wise Account, I've kind of talked to some of the attach rates there and the take rates, you see that actually these customers actually move a lot more money with us, but they do a lot more things. And you can see the other revenues that are coming through. Some of this is interchange revenue, some of this is payments – the domestic payments and some of this in the future will be -- maybe as we move into more international banking is going to be the asset feature that we see in the U.K. But you can see that actually that's 20% of customers are contributing quite a big chunk of our fees already as a business. And that will continue to grow.

Our second question comes from the line of Kim Bergoe at Numis Securities.

A couple of questions for me. One, and I think that links into the Wise Account. How should we now be thinking about interest rate sensitivity at Wise? And then the second question about the growth, where are your new customers -- you're on-boarding a lot of new customers, can you say anything sort of general about where they're coming from? Is it still customers that used to be with banks that are now going to you or what where are you taking customers from?

Right. Yes. So we -- so the interest rate sensitivity is present but a question that a lot of folks are asking at the minute is, will we start to get economic benefit for interest income from the balance that we hold for our customers. We hold many billions of customer balances, and this is growing. So we will start to see -- at the moment, we're still paying interest. We're waiting for the ECB to make this move and stop charging people for holding money. It's likely to happen soon. And then that -- and then we'll start to -- we're starting to see interest rates rise, as you know, in the -- whether it's in the U.K. or in the U.S. where we also hold balances. So we will start to see an interest benefit. Now for those -- just as you know that interest cost or income or net [ contract ] cost sits below -- is not in our revenue, basically. So you'll start to see that in the P&L above EBITDA, but not in our revenue. The first thing what happened is, is we're going to -- when we see the interest rates maybe go to 0 in the Eurozone, we'll stop charging our customers. So at the moment, we charge our customers over a certain balance for holding money with us. So we'll happily stop that, and our customers should ask us why we keep charging. And then the question is what do we do then we start to accumulate interest income that will come on board, but it will come on relatively slowly because we hold a bunch of the deposits in bond contracts, which we'll roll off over time. And also some of the money has to be held operationally, which means it moves quite quickly. So we don't always earn the interest on this. But the interest that we do earn, we can do 1 of 3 things. We can't pay our customers the interest directly, we're not allowed to. We can offer lower prices because at the moment, in some markets, we offer higher prices to subsidize the interest cost that we have, for example, in the Eurozone. We can use that like any source of value that we generate from the product as well to fund our investments. So if you think about the Wise Account, actually Mo's question just now, we actually have quite a basket now of income, which gives us a gross margin of our products. Before we were purely dependent on conversion income. And now if you think about it, we have a relatively stable take rate, whilst we have a reducing conversion costs, whilst making a lot of investments. And the reason we can do that is because we've got different sources of income. People ask how do we get our conversion costs down, let alone going to 0, is through building a broader set of income in the product. And then the third thing is, obviously, it could go to margin. But actually, given the investments that we're making in our products and the return that we see on these investments and the investments that we can make on marketing and the very short payback and high ROI there we see. Actually, we definitely will help -- this will help fund our investments. And of course, this is a way to make our products much more competitive. We can drive down this pricing, continue to disrupt this market, whilst actually maintaining very, very healthy economics over the medium to long term. And if you think about us building a value -- super valuable cash-generating business over the medium to long term, we would or cash generating today. It's continuing to make these investments in our product, in our marketing and also in our price. But we think -- you're right, Kim, we will start to see this come through in the coming months. It's going to give us competitive advantage. The second question is, is where are these customers coming from? I thought you're going to ask about geographies. But actually, it's a really cool question on which sources do they come from? In terms of geographies, people might be asking this, we have launched products in Malaysia, in Brazil and anyone following app downloads, you'll see significant uptake of these products. But actually, that's not flowing through to volume yet. But we're also seeing new customer growth in some of our biggest markets like the U.S. We've got real traction, really good product-market fit, which is actually driving word-of-mouth-driven growth in all of these markets. It's actually in order to find 1 million customers on a quarterly basis, you have to be growing these large markets, including the U.K. And then where do they come from? Well, they continue to come from banks. We continue to see people come across. They might also come from PayPal. I doubt they're really coming from many of the remittance players. You can see that actually as our volume has gone from 0 to GBP 100 billion run rate. Actually, we've overtaken Western Union now. We send more money than Western Union, but I doubt that much volume has actually come from Western Union. I think rather this has come from banks where this problem is most hidden and at the greater scale.

Okay, next question comes from the line of James Goodman, Barclays.

So for me, just digging in really to some of the numbers that we've seen for the quarter. I know, as you said, it's only 1 quarter, but just to understand some of the moving parts. I mean have you sort of done any analysis in terms of the sequential volume increase we saw this quarter, GBP 3 billion, it was a sort of record sequential increase in volume? About how much you'd attribute to travel specifically or to any other factors? And then also wondering if you can make a comment on the Platform business. I think at IPO is about 2% of volumes, wondering whether that's become more meaningful and is starting to make a bigger contribution to the growth? So that's the first area of question. And the second is just around the take rate. I mean you mentioned it up year-on-year slightly for the quarter as well sequentially. I think the first time in about 5 quarters. So is that primarily coming back to travel again in terms of is it really interchange revenues that's driving that? And what are your expectations for the rest of the year? Do you think that the take rate should moderate or structurally stay around this level?

Thanks for asking the questions. So where does the sequential volume come from? As you can see in there, the -- it is a big sequential jump in volume in Q2. And it's come proportionally, as you can see, across both our personal and our small businesses. Now question is why is that? Well, you can see that actually for people, it's just very solid active customer growth. And this is a couple of things. Yes, we're onboarding a lot of new customers. But actually, in order, the scale at which our base is with the many millions of customers we have in order to grow that, we're seeing that actually when people to the Wise Account, they become more active. You see that as typically looks like lower churn. But frankly, we're giving to our existing base a product that they can use more often. So instead of maybe using us once a year or less often, we get a greater share of what they do in our international transactions. And it means we have a greater -- more -- higher activity in the base. And this is a primary driver of why we're investing in our Wise Account because we know it just improves these fundamentals, build a better product for our customers, which naturally turns up better for us. And then on the Business, the increments of volume is actually coming from active customer growth, but also increases in VPC, volume per customer, increasing -- maybe it's inflationary product. Also, there's an element Q-on-Q of we're seeing -- if you follow volatility in the currency market, this has increased, it's been relatively benign for a year. And no doubt, this drives people's decision of when they might move. If they have a discretionary choice whether to move money this quarter or next quarter, they might pull that forward to this quarter. Your question around the Platform business, you're right, we did disclose that in our listing. We're not disclosing it. This is a long-term investment that we're making in our platform. And we really think about that as a start scale up within a high-growth business. That has a couple of consequences. It's -- we're making great progress. We're seeing awesome traction with not just neobanks which you've seen in the past, but other types of platforms, people that might manage payroll, people that manage invoices for small businesses or accounting platforms. We don't disclose it. It's still growing fast, and we may talk about this from time to time, but now this is a long-term investment we're making, and we're seeing really good traction with all types of institutions. The second question then, James, was around take rate. Yes, you're right, it did increase. Coming back to that travel, no doubt that travel has added an impact in our business over the last quarter. I mean you can see that whilst economically, there's many, many challenges going on, and that's going to maybe intensify, people are traveling more. But really like that doesn't drive so much of our volume, it drives an element of our volume, but it definitely drives the other income, it drives interchange income, and we've seen that grow for a number of reasons, but travel is going to be one of those over the last quarter, which drives revenue growing 51% year-over-year and 21% Q-on-Q. That's a quite a significant jump quarter-on-quarter. And it's a function of, yes, good fundamentals, FX volatility and this uptick in travel.

Next question comes from the line of Omar Keenan.

Hello? Can you hear me now?

Got you.

Sorry about that, I was on mute. Yes, I mean, congratulations on a good quarter. Lots of the trends look really, really encouraging. I was hoping perhaps to dig in a little bit into the revenue guidance and I was hoping you could help us with some of the drivers around the 30% to 35% assumption? I appreciate what you said about the possibility that some volumes were brought forward because of the FX volatility. But from what you're saying, it sounds like they're really positive underlying long-term developments in the business this quarter. So unless we see a sort of deceleration later on in the year, it would imply upside to the guidance because of those developments. Just wondering if you could help us with that?

Yes. Thanks for the question. I was asked, obviously, we were charged a few weeks ago why are we so confident in the guidance that we've put out. So bullish of us is what many other companies are seeing. And I think you see evidence in our numbers. It's just the fundamental positive trends we have in our business, some of which are driven by macro, some of which might be definitely short-term macro as well in that they could go forwards or backwards. Omar, fundamentals of what we've been investing in, in our products, in our infrastructure, in this market that are seeing really healthy growth. That said, we -- throughout the years that we've been operating and looking at quarters, this volatility can drive a very strong quarter and can pull volume forward and be followed by a lower quarter. But really, we've got to look through those quarters and look at the years -- for many years ahead. Yes, this gives us huge confidence around this range for this quarter. We give that to the market, but also we use that to manage and meter our own investments in our products to make sure we continue to make these investments that are super high return, whilst managing a very healthy level of credibility. So of course, we're investing in growing this business as fast as we can at this profitable level. But actually, this is the range we've got confidence we've given, yes, there's volatility in the market today. Yes, there's uncertainty over the coming year, but we'll continue to update you on a quarterly basis.

Our next question comes from the line of Alastair Nolan of Morgan Stanley.

Sorry, just unmuted. Just a couple for me. You mentioned the U.S. and some progress there. I think you've added some local account details and they're getting good product markets there. Just keen to hear a little bit more about the traction that you are seeing there and if there's any particular products that are resonating? And then secondly, on the wider product road map, is there anything we should be aware of on the -- in terms of kind of the upcoming horizon and road map there? Obviously, my understanding is you'll be rolling out the product set that is in the U.K. to other regions. But any new areas of focus? And then just finally, you've mentioned FX volatility quite a bit. Just keen to hear a little bit more about how Wise actually deals with that and perhaps if at all possible to quantify kind of the impact that you've seen on the take rate, but just really keen to hear how why specifically deals with that volatility internally?

Yes, great. Thanks for the question. So let me ask first one. So U.S. what's happening there? You're right, we have great product one that builds over time, like rarely in -- if you followed our mission updates, you'll see that actually, we made huge investments in our product. And what does that mean like as a user, if you look at the U.S. products, you may not be radically different rather, a lot of these investments are fixing the plumbing. The U.S. payment system is not the fastest in the world relative to what we're seeing in the U.K. or in the U.S. Actually you have to work really hard to drive a convenient way to get the money to Wise and then on to our platform, and it's hard work. Actually, we've done a lot of hard work behind the scenes or in the infrastructure to make that work super efficiently at a low cost. So those things just build up a much better product over time. They drive our NPS, and then therefore, they drive word-of-mouth growth, and we support that with really high payback marketing. So nothing radically has changed. We've changed how our product looks, yes. We've changed the Wise Account, it's getting more useful, and we're seeing great traction with that. But really, what we're seeing is we're just seeing payback on years of investments to continue to make this product a great product and make this product better and better for our U.S. business who want to send money around world. And that's going to continue. There's still a lot to build. Actually, if you look at our U.S. product, it's got plenty of things to fix before it's maybe as good as what we see in the U.K. But actually, if you wind the U.K. for about 3 years, that was the same story. So these things are just getting better and better over time. And what's on the product road map? You're right, actually, like we don't have a what we've done in the U.K. is people can send, they can hold, they can receive, they can spend. But then they can also the money that they hold, they can invest. And that's really our full product suite for people at the minute. What we're trying to do is roll that out around the world. You see we're actually launching the Wise Account in some countries where we don't have it. We're improving that by giving local bank details in other markets. How the card works and how the account works, there's lots to build out in these other markets. And we know the payback on that based on what see in the U.K. So that gives us high confidence in the investments that we're making. We're profitable. We're running at a healthy margin, but keeping it there because we know all these investments that we can make over the next many years. So I'm afraid, I don't -- to have like one more thing is another proper launch for you right now. There's -- but there's a lot we're investing in that we know we've got high return. And the third question was how we think about FX volatility? Wow, this hits like many places. It hits how much money customers move? In periods of volatility, we see customers tend to move a bit more. No doubt we're seeing that at the minute. You saw FX volatility creates risk. I mean that's the best -- good for the market. It creates volatility, it creates flow. But then we also need to manage that risk. And we think about it 2 ways, like, how do we avoid bad things happening like making losses that are too significant? And how do we actually manage it to a level that's acceptable and then charge our customers for this. So as many of you know, we manage our -- our treasury platform is a core part of the asset that we have here. The ability to move money around the world instantly whilst managing super low liquidity -- all of this speed without flooding with too much liquidity and then managing the FX exposure is just core to the infrastructure that we've built. Those FX exposures are managed with a value at risk model, as you'd expect, where we consciously take an amount of risk. And when I say take risk, we don't take positions, but we'll manage the FX exposures that we have simply by that are inherent in our products. The more we can manage down that cost of risk, the less we have to charge our customers. Effectively, we recover this. These costs are in our COGS or above our gross margin. So when actually last year you saw this volatility reduced and we'd engineered a bunch of the stuff away, we were able to drop our prices. But over time, we'll continue to monitor what -- how much we can manage, how much it costs us to manage this risk for our products and for our customers. And if we can manage that risk away, pricing will go -- continue to go down. But no doubt in the short term, there can be pressures on recovering some of that price. A typical FX company would just include that in the spread and effectively hide that from its customers. We have it quite explicit. So if this risk goes down, we'll continue to drop prices. If it goes up, we may see pressure to keep prices where they are or even increase them. But we -- essentially, we make sure we cover the costs of this risk.

Our next question comes from the line of Josh Levin at Autonomous.

So 2 questions. One, so you've noted a few times that some of the volume growth during the quarter could be a pull forward due to FX volatility, to what extent could customer growth during the quarter also maybe be due to FX volatility? And then the second question is actually about your annual report. In the annual report, it says that 94%, so a very high percentage of Wise employees are proud to work for Wise. But it also says that only 66% intend to be working at Wise 2 years from now. And I mean, that would suggest that 1/3 of the workforce could turn over within the next 2 years, how do we reconcile those metrics? And I guess why might 1/3 of employees be thinking about maybe not working for Wise 2 years from now? Is that just standard for the tech industry or is there something unusual going on?

Cool. Thanks, Josh. So the first question is, absolutely, there could be some of this -- people are moving money, they could be -- let's say you were thinking of moving money at some point this year, Josh, and you said now is the time, instead of being -- remember, our active data means, have you been active on the platform and made a cross-border transfer within that quarter period? So if you had -- if you weren't planning on doing it and you were planning on making this payment in November, but you saw now the time, you would be active today rather than in the future. We tend to see a balance of this impacting volume per customer but also active rates. So Josh, you're right, it could have some impact on that. And then on question on the data. Yes, so fundamentally, we have a very, very healthy and strong culture at Wise, where we attract people who want to work here to impact on our mission and kind of build things that are truly valuable to customers. And I believe and we believe that this shows in our products and everything that we do. We're still hiring. We have lots of open roles. But of course, like I would -- we don't compare and benchmark this versus other companies in the survey, but the nature of our workforce and the age, I mean people, of course, would change roles they play throughout their career. So I couldn't comment on other companies, but I would expect -- this is not a statistic I would be surprised by or something that we're seeing specific challenges with attrition. I know it's very high in the tech industry today, and it's very challenging, not just in the tech industry, but the professional services industry. But we continue to be able to attract, hold, retain our talent and attract talent at the rate that we want. And who knows what's going to happen over the next year with the changes in the funding environment. We continue to hire. We've got maybe 400 open roles, and we kind of continue to invest in our team.

[Operator Instructions] We've got one question from the line of Aditya, Bank of America.

Just a couple from my side. I mean, if I look at the road map on the Wise website, you'd talk about, for example, launching rewards for using the Wise card for both, I guess, personal users and even for business users. So could you maybe expand on that? Is that something that's already there? And actually think about the, I guess, the traction for that -- for the Wise Account and the card? Then second question is, you've spoken about assets. I mean, is there any -- how is it looking in terms of rolling that out to the other markets as you go through this year? And then finally, I mean, there's been, I guess, few questions on the full year guidance on revenues, but I know you didn't really give any specific margin update down 1Q. But given the top line growth you had in the first quarter and maybe some potential benefits on EBITDA from interest rates, how are you thinking about the [indiscernible] for the rest of the year, is there anything in particular which should sort of stand out as we go through the remaining part of this year?

Great. Thanks for the question. So there were 3 things in there. First thing, you read in our mission update talking about rewards on our Wise cards. So -- and the first thing is why do we offer the Wise card? There's lots of businesses around the world that are -- that have a customer base, and they trying monetize that customer base as much as they can with different products. They see which ones fit which ones don't. For us, I'd say it's the other way around, like we have a core business that we do really, really well, which is helping people manage and move their money around the world. So the question is, what can we build from a product perspective to help them do that better, get more of those people to come and use Wise, save them billions of pounds and in doing so, fund and build an amazing valuable business out of time. So I think it's slightly nuanced versus this other strategy. But the strategy is credible. So the Wise card is actually a feature of our Wise Account. And the Wise Account is what's driving a lot of our growth into that. So actually, this Wise card, yes, it pays us interchange income. But actually, it makes the account way more useful to people open an account, move a lot more money with us. So actually rewards, especially in different interchanging markets. Remember, the U.K. is very different to the U.S. for personal customers and business customers different around the world. So actually, like in order to offer this as a really compelling attractive account, we do get economics from our cards through the form of interchange. So actually, if we can -- just like many -- it's a well-known thing, if you've got an incentive -- relative incentive to use the card and get rewarded for that, why not, especially when you think about how we run our business as well, we're going to run this service profitably. We're not -- this isn't just an acquisition tool, we'll only offer a service, if we can do that actually economic and profitability. So we'll look at it. It's still going to work necessarily everywhere around the world, but we'll look at doing this where it could help our products become much better for our customers, help them use Wise more and do so in a profitable, sustainable manner. Second question on assets. Again, assets is another product that we launched, not because we want to become a just launch a sales trading platform, actually because people hold billions of pounds with us and we want to make sure that that's useful. Typically, if you hold that money in your bank, the bank will rent that money out to someone with a mortgage or a loan, but actually typically not reward the people who actually provide the assets, the cash. So actually our model is, well, we feel customers should get rewarded for this. And the way we can actually do that directly is by launching our investment products. People can hold equities and maybe there'll be other assets in the future. We've launched that in the U.K., and we're trying to launch that around the world. Now one thing about Wise, which is quite distinct versus lots of other companies, is very few fintechs have managed to roll out truly globally. It's incredibly hard to get these different licenses around the world, and most fintechs will stop in 1 or 2 markets. Actually, Wise I think is one of the few -- very few companies who've managed to get that footprint. And we're following that now for assets. But it's going to take us a lot of time. But trust that we'll start looking at it in Europe and other jurisdictions around the world, but it's going to take a while. So it's very early on assets, but it's going to become a core feature just like you asked on the Wise card for the long term as to what is this Wise Account. And third question is, margin guidance, you're right. We haven't changed any guidance for the margin. It's still at or above 20%. And why is that? I'll just reiterate. We have a massive market that we can disrupt with these products in this infrastructure. And that takes an investment. We know pays back. You can see that in these numbers. These investments are incredibly efficient. And then also, as you onboard 1 million customers a month, that takes a huge effort to hold customers upfront. So we have to grow our teams and invest in our team, build our teams to be able to do this sustainably. So actually, we can make all of these investments in our growth because we're generating that growth demand and then we're generating the capacity to onboard that demand, which helps us grow. And we grow profitably and still make all of these investments. And we've got a huge runway. The question was asked just like -- do we just need -- Alastair, you asked you need to roll out these products around the world? There's a really long runway of things for us to build. The things that we've already defined, and we know the payback and we're able to continue to support that with marketing. So actually, like the return we see on these investments is very high and warrants our spending -- investing this money whilst holding at a very healthy and quite enviable 20% EBITDA margin at a time.

Thank you. We have a next question from the line of Chris Hartley at Redburn.

Just a quick question on the sort of the macro environment. So in you subsensitivity to it, so on the one hand, you get a positive benefit from increased FX volatility that's driven, on the other hand, are you able to give us any sense of your sensitivity to an economic slowdown, sort of a recession in Europe, adverse economic scenario. Do you have a feel for how sensitive you are to GDP growth, that sort of thing? And then a second question, just on your other revenues. Just to clear up in my head. So when you generate more other revenue be that through interchange or whatever it is, do you use that to subsidize customer pricing? Or do you take that revenue and take it below the line and then invest in engineering away costs and thus reduce customer price. I just wanted to understand is in terms of direct kind of offset to pricing?

Let me just answer that second one quickly. So no, we don't subsidize. But actually, these other revenues will have -- some of them we choose the price for, like we choose how much we charge our customers for domestic payments or ATM fees or the like ones or account fees, some of which we don't choose the pricing. We effectively receive interchange income. But largely, we have -- we mentioned we have a healthy margin on that product, not excessive. And essentially, what it does is it just contributes to the gross margin equivalently. So if you think about that from the Wise Account's perspective, people are growing money from people converting with us, Chris, but we're also earning money from the other things they do. So we have a distributed source of gross margin income from our customers over time, which means that actually in order to fund all these investments, that comes from a broader set, so we can actually continue the same, if not increase the level of investing capacity or margin generation capacity ultimately, cash generation capacity. But we fundamentally do that whilst being able to continue to lower prices and put more and more pressure on the industry and pressure on pricing, which makes us more and more competitive over time. And the first question was macro which is very interesting. So like what's happening? Yes, there's 2 sites. So definitely, FX volatility drives an element of volume in the short term. But what about the risks on the downside? When you think about just our customers, think about people and businesses like what happens to their demand for our services in a downturn? Most of what our people -- our customers do, whether personal customers or business customers is nondiscretionary. What do I mean by that? They're paying their mortgage, they're paying their rent, they're funding their children, siblings at a university. Well, they're just managing their bills that they have to pay on their accounts to people. Businesses, they're paying their suppliers, they're collecting money from their customers. These are all -- people don't send the money around the world for fun. There's an element of travel, but it's a small element of the volume that we move. So on one hand, like we're not over-indexed to like ups and downs in disposable income. No doubt, however, money -- cost of living crisis is real. And this will impact our customers. Businesses will be challenged. Small businesses may suffer. But this is -- we're seeing at the moment is more than countered by just in small businesses, for example, just the increasing costs of their supply chain. What they're having to the fund is increasing. And then also, as things get much more expensive, people get aware of the problem, they're going to seek out the lowest cost provider. So generally, in this industry, if you look at the -- I think the remittance data is the clearest, you will see a slowdown even a dip in the last recession. But we have a very diverse customer base. Yes, we have people sending low amounts to their family, but we -- our vast majority of our customers are probably people sending dollar to pounds, euro, dollar, et cetera, which have just a very different profile of income as well. So we haven't been through one of these cycles, so I can't -- we're rightly cautious, but it doesn't feel like we are over down -- under down, sorry, to any swings in GDP. And the rates at which we're growing kind of -- we're growing -- we're very early in a massive market. So we're rather focused on how do we invest for the next 5 years rather than optimizing the next one.

Thank you. The next question comes from the line of Justin Forsythe at Crédit Suisse.

Just a quick one. I wanted to rehit that point you talked about around the pull forward of demand related to FX volatility. And actually piggyback a little bit on that prior comment that you made around price elasticity. Can you give us any more color around the ability for you to kind of bifurcate those impacts? And how you know, I guess, that consumers or users are actually pulling forward potential future spend. Is that something you've seen in the past, kind of in the last, say, 10 years or so when there's been FX volatility where there's been a subsequent drop off? Or is there a little bit of uncertainty as that specific impact and how that would maybe be impacted by some of the macro going forward?

Yes. It's very hard. If we weren't growing, I think you'd see us have 1 big quarter, we'd have a quarter up or quarter down or quarter up, quarter down. The fact is we're growing the business very healthily that active customers growing mid-30%, volumes growing at 50%. So -- and then Q-on-Q growing very healthily as well. But you will see that, for example, in the last quarter of 2021, calendar year like October, November, December, you saw a big jump, actually. And I was -- we were curious, we saw some volatility in this quarter around what was going to happen the next quarter. Actually, the Q3 -- start of Q3 and then Q4 FY '21 -- '22, sorry, was actually grew margin Q-on-Q, so you can see that the Q-on-Q growth is not consistent. There's an element of seasonality, but there's an element that you'll see this FX volatility. So I can't really quantify it. And actually, if you think about how we're investing, if you think about what we're spending our time is, it isn't relevant. I would rather encourage you to say, okay, like what are these fundamentals of market, the products, our infrastructure and the way we're investing mean for 3, 4, 5 years rather than this quarter, next quarter? I think we're going to see some of this volatility, every business around the world is going to see this. But actually, for us, like it just tells us that we're seeing great momentum that the product is highly relevant, very huge proportion of the world, and we're just investing behind that. Very hard to call how much of this is due to this volatility. No doubt in that.

I guess -- all right. That's super helpful, Matt. Just one brief follow-up to that around perhaps specifically hitting that price elasticity point. I mean is that something that you would generally think that your cohort of consumers, whether using Wise Account and/or Wise transfer are subject to, meaning we would typically, I would say, think of like Western Union of some -- a type of consumer that's more perhaps subject and sensitive to price moves or volatility moves over time of FX? Is that something that you would say your customer cohorts are subject to as well? Or is that something you'd say maybe doesn't impact them to as great of a degree as perhaps some of the other remittance senders?

So I think on some routes, you'll see more price sensitivity than other routes. Like some of the remittance corridors that Western Union might operate on or other like in that market segment, there is a relative sensitivity on, for example, sending -- we now are sending money to India or Thailand or Philippines, very price sensitive. All you can do there in that situation is make sure that sustainably you can be the lowest cost provider. We send an awful lot of money down those routes, and we do it at a profitable price. But just to be clear, we don't ever -- if you see our stock prices, it's never because we are trying to compete on a route, never done that. We've never increased prices because we can. We charge the lowest price we can whilst generating a very healthy margin. And it's really what I said, so like, yes, some of these customers on these routes are price sensitive, which is exactly why we believe that if in 5 years, we're offering -- that we have the lowest unit cost, and we're offering a radically lower price that -- I mean if you look at some of the remittance companies that are offering price points at around 1% or 2% on these routes, it's still very hard to be profitable for them at that price point, whereas we are profitable and radically up one. So you can look at the quarter-to-quarter rate sensitivity to this or you can look at, if you believe in 5 years, we can offer a price that's 3, 4, 5x cheaper than they can offer today and we're investing in infrastructure that these companies are not. It's quite clear to see that the long-term price elasticity, if that makes sense, Justin, is always without to happen in our minds, and that's the belief around which we invest in these are price changes. So looking -- and we'll proudly compare our price against these people on our app. And generally, we do pretty well today, but we're continuing to drive down this price and put pressure on the industry.

Thank you, Matt. We have no more questions.

We didn't get to 10, 9 questions. Thanks, everyone, for dialing in. I know it's early for some folks. We're trying to work out how to accommodate everybody. But hopefully, it's worth setting your alarm for going up here in the U.S. and U.K. Thanks very much. Enjoy this fostering weather. Just to remind you, this is just 1 quarter out of many, many years. We've been going to 10 years, and we've got many decades to go. These 3 -- these 4 points that I'll come back to: we're very early disrupting a massive market that's got major problems to solve. We've moved -- we're moving over GBP 24 billion a quarter, growing 49%. There's still -- we're really moving significant amounts of money, but there's so much more to do. We're doing that with the great, amazing products of Wise Account, Wise Business. It's this that is really resonating with our customers today. And as you know, there's lots more to build, building that product out around the world. So we're heads down continuing to build on things that we know will pay back and has built on this infrastructure, which we think is what -- and our customers tell us is what truly differentiates us, and that's getting stronger and stronger every year, which is going to help us build better and other products in the future. And we're doing that profitably. We are profitable. We have a healthy margin, but that's after making significant investments in our growth that are very efficient, and we'll continue to scale those investments as we continue to focus on very long term. So great quarter, but it's just one proof point out of many, hopefully, that will give you confidence over this -- it certainly gives us confidence over this long time. So thanks very much, and I'll speak to you in the course.